What are small finance banks?
Small finance banks aim to provide banking and credit services in rural areas and interiors. They cater to small farmers, businessmen and other marginalised sections of the society, where mainstream banks have not penetrated as yet. Thus they provide financial inclusion to underbanked people.
For small finance banks, making customers invest on a continuous basis is a key challenge, say experts. "As digital penetration and use of handheld devices make customer acquisition easier for all even without having physical presence in the interiors, private sector banks are engaging microfinance companies as their business correspondences to mobilise low-cost deposit from rural catchments," said Rakesh Singh, retail head, SVC Bank.
However, interest rates on their savings accounts and fixed deposit accounts are lucrative and many a times even better than mainstream banks. Given below are interest rates on recurring deposits offered by AU Small Finance Bank, Equitas Small Finance Bank and Suryoday Bank:
|Banks||Up to 1 year||Up to 3 years||Up to 5 years|
|AU Small Finance Bank||7%||7.25%||8%|
|Equitas Small Finance Bank||7.50%||7.75%||7%|
Post offices also offer the option of opening recurring deposit accounts.
Get Breaking news, live coverage, and Latest News from India and around the world on NDTV.com. Catch all the Live TV action on NDTV 24x7 and NDTV India. Like us on Facebook or follow us on Twitter and Instagram for latest news and live news updates.